Thursday 4 September 2014 02.30 EDT
First published on Thursday 4 September 2014 02.30 EDT

Towards the end of this subtle, thoughtful biography of Queen Victoria AN Wilson presents his defining argument. Victoria, he suggests, was an artist. He isn't talking here about her rather good watercolours, but something more profound. The queen, he claims, lived an entirely inward life, filled with characters and narratives of her own making: saintly Albert, bad Bertie, twinkly Disraeli and the wicked, wicked Boers. Just like that other epic storyteller Marcel Proust, Victoria stayed home (although, unlike the Frenchman, she never allowed herself to lie in bed) and conjured up a world that unfurled over the decades as larger-than-life characters bloomed, hovered and faded, leaving behind their own particular perfume.

It is the queen's inwardness, Wilson says, which makes her such an excellent subject for a biographer. There's no requirement to go puffing after her on endless banal state visits, bridge openings, or troopings the colour – because she didn't do them, or at least not much. Anyway, Wilson covered all that in The Victorians, his bestseller of 10 years ago that dealt with the 19th-century's outerworld of iron, brick and cotton bales. In this new book he prefers to stay indoors with Victoria in one of her freezing residences as she pours out millions of words into her daily journal and letters, sifting external events through what Wilson calls "the rich comedy" of her consciousness.

Like any artist whose vision was both protean – she was perfectly capable of believing six contradictory things before breakfast – and particular, Victoria has been a magnet for biographical rereadings in the 11 decades since her death. The best include Lytton Strachey's surprisingly tender Queen Victoria of 1921 and Elizabeth Longford's still highly readable Victoria RI of 1964. Then, in the 1990s, academic scholars got hold of the queen and the result was a poststructuralist Victoria – all fragments, gaps and jagged edges. Now, 20 years since that last serious flurry of biographical interest, Wilson picks up the pieces and puts the jigsaw back together again, creating in the process a Victoria for our own times.

And what those times require, it turns out, is a passionate pan-Europeanist. It has long been a given of Victorian scholarship that Prince Albert spent his short, strenuous life trying to graft German liberalism on to the British constitution to create a template of moderate monarchism that could withstand the challenge of revolution and nationalism alike. His grand idea was to export this model back to Protestant Europe as a gift-with-purchase whenever someone married one of his and Victoria's nine-strong nursery tribe. By this means every Duchy, Palatinate and hyphenated micro-kingdom would be given the tools it needed to stay safe in an uncertain world. They would also, in time, join up to form a central European hub that was rock-solid liberal.

The assumption has always been that by the time of Albert's early death in 1861 this project had stalled under pressures of working class democracy at home and Prussian militarism abroad. Wilson, though, has been back to the archives in Coburg and reconnected with the tap-root of Victoria and Albert's plan for a united, moderate Germany. He shows convincingly that, despite being poleaxed by grief at losing her "Angel", Victoria remained passionately engaged in what might be described as "the Coburg project". When the Schleswig-Holstein crisis blew up in the early 1860s she understood, in a way that her prime minister, Palmerston, did not, that buried in this parochial squabble between Prussia and Denmark were the first signs of the Bismarckian aggression that would eventually rip Europe apart. It was only thanks to the wise queen, suggests Wilson, that Britain did not blunder into a war with Germany at this point, 50 years before it was capable of winning.

Wilson pays proper attention to the Hanoverian side of Victoria's inheritance too. She was the granddaughter of King George III, which meant that whenever she behaved oddly courtiers began to wonder if she might be mad. Wilson believes that there were times, especially in the late 1860s, when Victoria was properly "out of her mind". Her letters to Gladstone, sometimes scrawled in blue crayon and barely stretching to two lines, read like dispatches from an interior world to which the drawbridge has been pulled temporarily shut.

In the end, though, Wilson doesn't put the queen's strange episodes down to porphyria, the heritable disease that is assumed to have caused her grandfather to clatter off into his own imaginary kingdom. Instead, he blames grief, the menopause and too much whisky: Victoria picked up the tippling habit from John Brown and never shook it off. And as to whether or not she actually slept with the man in the tartan skirt, Wilson thinks it doesn't really matter, although it's pretty clear he thinks she did. What interests him, rather, is the way that "Mrs Brown's" spectacular bad behaviour makes her the obvious, if unlikely, role model for her scoundrel heir, the hapless Bertie. Mother and son both did exactly as they damn well pleased, embarrassing their families and imperilling the monarchy as they acted on the prompts of their own emotional and erotic inner worlds.

This makes Victoria's constant criticism of Bertie as well as his siblings – arrogant Affie, wild Louise, selfish Leopold – seem hypocritical. But, Wilson insists, for Victoria, the political always remained intensely personal. She was critiquing her children not so much as real people but as characters in an imaginary dynastic drama, as vivid to her as the Guermantes were to Proust. As Prussia began to dominate Germany, the ageing queen continued to fret over the marriages of her grandchildren – all those oyster-eyed Victorias, Alices, Arthurs and Alfreds – who were to be sent out in a second wave to the four corners of Europe, carrying their fateful cargo of haemophilia, porphyria and sound constitutional principles.

Of course, anyone who gathered in the streets in 1897 to wave a flag as the queen passed by on her way to celebrate her diamond jubilee with a Te Deum on the steps of St Paul's was probably not thinking much about the Coburg project. Decades earlier she had thrown in her lot with Disraeli, that other great storymaker, who had turned her into the Empress of India, a suitably gaudy figurehead for the new age of popular, jingoistic Toryism. All the same, Wilson suggests in this shimmering and rather wonderful biography, as the elderly queen smiled and inclined her head to the ecstatic crowd, it was still possible to discern in that dumpling form traces of all the earlier versions of herself still buried deep inside. She had become nothing less than a symbol of Time itself, a reminder of the good intentions of the past and a warning about what might happen once she was gone and, with her, the dream of a united Europe.

• To order Victoria: A Life for £18.99 with free UK p&p call Guardian book service on 0330 333 6846 or go to guardianbookshop.co.uk.